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By John Heilemann, Business 2.0 Magazine columnist
January 17 2007: 6:24 AM EST
"...Richard Rosenblatt tells me that his company, Demand Media - an ambitious attempt to build a user-generated content powerhouse on top of a pile of generic Web domain names - intends to go public in late 2007 and attain a $2 billion market cap by mid-2008.
And Rosenblatt isn't alone in seeing these goals as achievable: Venture capitalists have already pumped a jaw-dropping $220 million into Demand.
The first conclusion here is that anyone who still thinks Web 2.0 isn't a bubble ought to have his head examined. The second is that Rosenblatt is steaming toward disaster - or a monster payday. Either way, his story captures the current upheaval in both the old- and new-media industries, especially the frantic scramble to find the next MySpace.
Few people are better qualified for that pursuit than Rosenblatt.
A 37-year-old native of Los Angeles's San Fernando Valley with a high-pitched voice and a disarmingly guileless demeanor, Rosenblatt has been pushing user-generated content for a decade. In 1999 he sold his create-your-own-storefront startup iMall to ExciteAtHome for $565 million. Five years later he was recruited to lead the turnaround of Intermix Media and its main property, MySpace.
Inside of 18 months as Intermix's CEO, Rosenblatt took the company from the red to the black and then to the auction block, selling it to Rupert Murdoch's News Corp (Charts). for $580 million
"Every major media company had looked at us," Rosenblatt recalls. "Mr. Murdoch was the last one in but the only one who totally got it."
A few months later, Rosenblatt was casting about for ideas for his next startup when he came across an article in - yup - Business 2.0 bearing the headline "Masters of Their Domains" (December 2005). The story was about how domain-name speculation had been transformed by cost-per-click advertising systems, how millions of people ignore search engines and type what they're looking for directly into their browser's address field, and how the owners of generic addresses (Candy.com, Cellphones.com) profit by setting up pages where the only content is blue-text link ads.
The story set off a chain reaction inside Rosenblatt's head. "I thought, it can't be that easy," he recalls. "So I talked to some domainers, and they said, 'We own 300,000 domains, we make $20 million a year, we have just four employees and some servers in the Caymans.' I thought, 'If you can make that much doing nothing, what if we added some Web 2.0 sprinkle so that people would come back - user publishing tools, social networking? What if we built a platform where we could snap that into as many domains as we wanted?' That's when the lightning bolt hit me: You'd have a company that generates its own traffic, generates its own content, and monetizes itself. It would be the perfect lazy-man's media company!..."
http://tinyurl.com/3cuyw2
January 17 2007: 6:24 AM EST
"...Richard Rosenblatt tells me that his company, Demand Media - an ambitious attempt to build a user-generated content powerhouse on top of a pile of generic Web domain names - intends to go public in late 2007 and attain a $2 billion market cap by mid-2008.
And Rosenblatt isn't alone in seeing these goals as achievable: Venture capitalists have already pumped a jaw-dropping $220 million into Demand.
The first conclusion here is that anyone who still thinks Web 2.0 isn't a bubble ought to have his head examined. The second is that Rosenblatt is steaming toward disaster - or a monster payday. Either way, his story captures the current upheaval in both the old- and new-media industries, especially the frantic scramble to find the next MySpace.
Few people are better qualified for that pursuit than Rosenblatt.
A 37-year-old native of Los Angeles's San Fernando Valley with a high-pitched voice and a disarmingly guileless demeanor, Rosenblatt has been pushing user-generated content for a decade. In 1999 he sold his create-your-own-storefront startup iMall to ExciteAtHome for $565 million. Five years later he was recruited to lead the turnaround of Intermix Media and its main property, MySpace.
Inside of 18 months as Intermix's CEO, Rosenblatt took the company from the red to the black and then to the auction block, selling it to Rupert Murdoch's News Corp (Charts). for $580 million
"Every major media company had looked at us," Rosenblatt recalls. "Mr. Murdoch was the last one in but the only one who totally got it."
A few months later, Rosenblatt was casting about for ideas for his next startup when he came across an article in - yup - Business 2.0 bearing the headline "Masters of Their Domains" (December 2005). The story was about how domain-name speculation had been transformed by cost-per-click advertising systems, how millions of people ignore search engines and type what they're looking for directly into their browser's address field, and how the owners of generic addresses (Candy.com, Cellphones.com) profit by setting up pages where the only content is blue-text link ads.
The story set off a chain reaction inside Rosenblatt's head. "I thought, it can't be that easy," he recalls. "So I talked to some domainers, and they said, 'We own 300,000 domains, we make $20 million a year, we have just four employees and some servers in the Caymans.' I thought, 'If you can make that much doing nothing, what if we added some Web 2.0 sprinkle so that people would come back - user publishing tools, social networking? What if we built a platform where we could snap that into as many domains as we wanted?' That's when the lightning bolt hit me: You'd have a company that generates its own traffic, generates its own content, and monetizes itself. It would be the perfect lazy-man's media company!..."
http://tinyurl.com/3cuyw2
